02057cam a22002537 4500001000600000003000500006005001700011008004100028100002700069245016200096260006600258490004100324500001800365520096700383530006101350538007201411538003601483690006801519700002501587710004201612830007601654856003701730856003601767w4507NBER20150303135847.0150303s1993 mau||||fs|||| 000 0 eng d1 aPolinsky, A. Mitchell.10aOptimal Awards and Penalties when the Probability of Prevailing Varies Among Plaintiffsh[electronic resource] /cA. Mitchell Polinsky, Daniel L. Rubinfeld. aCambridge, Mass.bNational Bureau of Economic Researchc1993.1 aNBER working paper seriesvno. w4507 aOctober 1993.3 aThis article derives the optimal award to a winning plaintiff and the optimal penalty on a losing plaintiff when the probability of prevailing varies among plaintiffs. Optimality is defined in terms of achieving a specified degree of deterrence of potential injurers with the lowest litigation cost. Our main result is that the optimal penalty on a losing plaintiff is positive, in contrast to common practice in the United States. By penalizing losing plaintiffs and raising the award to winning plaintiffs (relative to what it would be if losing plaintiffs were not penalized), it is possible to discourage relatively low-probability-of-prevailing plaintiffs from suing without discouraging relatively high-probability plaintiffs, and thereby to achieve the desired degee of deterrence with lower litigation costs. This result is developed first in a model in which all suits are assumed to go to trial and then in a model in which settlements are possible. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aK41 - Litigation Process2Journal of Economic Literature class.1 aRubinfeld, Daniel L.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w4507.4 uhttp://www.nber.org/papers/w450741uhttp://dx.doi.org/10.3386/w4507